Government set record for airline fines in 2012 — is that good news for passengers?

A more activist Transportation Department, which set a record in 2011 for the number of fines it issued against airlines for violating aviation consumer protection rules, appears to have maintained its momentum this past year.

In 2012, the Department issued 49 fines for consumer rule violations and assessed $3,610,000 in penalties, exceeding the previous record of 47 fines and $3,264,000 in penalties issued in 2011.

Among its most significant actions: policing new rules that require airlines and travel agencies to quote a full fare and disclose baggage fees, and fining the first foreign airline for a tarmac delay.

“Consumers deserve to be treated fairly when they fly,” says Transportation Secretary Ray LaHood, who called protecting air travelers’ rights “a high priority.”
While the fines may seem small in comparison with other penalties imposed by federal regulators, they’re important for two reasons, say insiders: First, they’re a significant increase from the past, signaling a no-nonsense approach to consumer protection from the federal government. (Consider that in 2010, the DOT’s Aviation Consumer Protection and Enforcement division, which is charged with enforcing consumer laws for airlines operating in the United States, issued just 27 orders and $1.7 million in fines.) And second, each enforcement sets a precedent and puts travel companies and their lawyers on notice that the activity they’re engaging in is illegal and won’t be tolerated.

In the end, that benefits all air travelers.

But the department’s enforcement actions in 2012 — you can find most of them online — tell a bigger story than that of a government trying to protect air travelers. They’re a road map of service meltdowns and “gotchas” that, seen as a whole, provides a useful guide for anyone flying this year.

For example, one of the most important DOT actions of 2012 involved enforcing a rule that requires airlines and travel agencies to quote a full airfare, including any mandatory fees and surcharges. In July, DOT fined Travelocity $180,000 for failing to include fuel surcharges in some international fares through a feature on its site called a “flexible date” tool. The online agency says that it wasn’t capable of including certain carrier-imposed surcharges, such as fuel surcharges, in its price quotes.

To address the department’s concerns, Travelocity promptly deleted the flexible date tool from its site. But the takeaway for air travelers in 2013 is clear: Although the DOT’s interpretation of its full-fare rule is unambiguous, the travel industry’s may not be. Always double-check the price before clicking the “buy” button.

Another key enforcement action came in October, when DOT fined the Australian airline Qantas for failing to disclose its luggage fees. Under new regulations, airlines are required to show baggage fees “clearly and prominently” on the first screen where they quote a fare for a specific itinerary. The government alleged that Qantas waited until later in the booking process to reveal the fees. Qantas says that it did disclose the charges, but in a different place on its site. It was fined $100,000.

For consumers, such an enforcement action carries an obvious lesson: Always be on the lookout for hidden fees, even when they’re supposed to be disclosed up front, because an airline’s understanding of “disclosure” may not match yours, and the potential for unpleasant surprises still exists.

Enforcement officials with whom I spoke for this story pointed to one more enforcement action that’s worth noting, involving a rare tarmac delay. It happened in October 2011, when a Pakistan International Airlines flight was diverted from New York to Washington after a freak snowstorm. Although the aircraft remained on the tarmac for more than four hours, passengers weren’t allowed to deplane, violating one of the DOT’s newer regulations involving lengthy ground delays.

The airline blamed a variety of technical and logistical problems for the delay. After an investigation, the government fined it $150,000 in September.

Fortunately, tarmac delays of more than three hours are an anomaly. In the last three months of reportable data to the DOT, covering August, September and October 2012, there were only two such delays, which exceeded the three-hour limit by only 4 and 6 minutes. Had the passengers on the Pakistan flight been aware of the government’s new tarmac delay rules, they might have alerted the crew that it was in violation of those regulations and they could have potentially been spared a lengthy wait in a parked aircraft.

DOT will probably extend its enforcement record in 2013, when it’s expected to unveil a draft of new consumer protection rules that would require airlines to disclose more of their fees and make airfares easier to compare. It’s also working on new regulations that would give disabled air travelers greater access to air travel. “We will continue our efforts to improve the air travel experience for consumers,” says LaHood.

What’s the big idea?

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